JUNE 2016
Factsheet:
Digital industries in the UK
Introduction
This fact sheet provides an overview of the digital industry structure in the UK using the latest data from the
Office for National Statistics Interdepartmental Business register (IDBR), Annual Population Survey (APS) and
Annual Business Survey (ABS).
Key findings
Of the 31m people working in the UK in 2015 1.75m (6%) were working in the digital sector – 1.1m
(61%) within digital businesses and a further 0.65m (39%) as digital specialists within other parts of
the economy.
There were 170,000 digital enterprises in the UK in 2015 representing 7% of the entire UK business
population.
Just under one half (48%) of digital enterprises were located in London/the South East of England.
At sub-regional level, Reading was the local authority with the highest density of digital enterprises –
21% of local business in 2015.
More than nine in ten digital enterprises in 2015 were IT businesses (91%) and virtually all (93%)
were digital service providers.
The number of digital business increased by 30% between 2010 and 2015 – almost twice the
increase in UK business enterprises as a whole (17%).
Virtually all digital enterprises (99.8%) were classed as SMEs and the proportion of large digital
employers was half that for UK industry as a whole (0.2% and 0.4% respectively).
In total there were 1.16m people working in digital businesses in 2015 – 3% of the UK workforce.
Employment across digital businesses is mainly focussed in IT (74%), with Telecoms employing 24%
and Games 2%.
The number of workers in the digital industries increased by almost three times the rate recorded for
all UK workers over the past five years (2010-2015).
Turnover amongst digital businesses in 2014 was £209bn, 6% of the UK total.
The gross value added (GVA) by digital enterprises was £94.8bn – 6% of the annual total across all
UK industries.
Of the digital GVA contribution, 62% was from IT businesses, 37% from Telecoms and 0.4% from
Games establishments.
The increase in digital GVA over the five years 2009-14 exceeded overall growth in the economy in
the same period with comparison figures of 27% and 20% respectively.
The gross value added to the economy per worker in the digital industries was almost double the
norm for UK workers, £92,000 for digital industry workers compared with just £54,000 for workers as
a whole.
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Factsheet:
Digital industries in the UK
1
About the Tech Partnership
The Tech Partnership is a growing network of employers, collaborating to create the skills for the digital economy.
It acts for the good of the sector by inspiring young people about technology, accelerating the flow of talented
people of all backgrounds into digital careers, and helping companies to develop the digital skills they need for
the future.
For further information please visit www.thedigitalpartnership.com
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Factsheet:
Digital industries in the UK
2
1. Digital industries, digital specialists and the digital sector
Latest estimates from the Office for National Statistics (ONS) show there were approximately 31m
people working in the UK in 20151 of which 1.75m (6%) were working in the digital sector – 1.1m (61%)
within digital businesses (in digital or support roles) and a further 0.65m (39%) working as digital
specialists within other parts of the economy.
Figure 1: The digital sector and the digital workforce, 2015
Source: Analysis of data from the ONS Annual Population Survey (APS) undertaken by The Tech Partnership
The characteristics and growth trends associated with the digital workforce are explored in detail within a
series of factsheets published by the Tech Partnership whilst this report seeks to build on this
knowledge base by presenting an analysis of employer characteristics using information from the Office
for National Statistics Interdepartmental Business Register (IDBR), the Annual Population Survey (APS)
and the Annual Business Survey (ABS).
1 Workforce estimates in this publication supersede those presented within previous factsheets and are not directly compatible due to the
utilisation of different ONS datasets
Digital specialists in digital firms
(614,000)
All working in digital sector
(1,749,000)
Others workers in digital firms
(448,000)
Digital specialists in other firms
(687,000)
All digital specialists
(1,301,000)
Workers in digital firms
(1,061,000)
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Factsheet:
Digital industries in the UK
3
2. Digital enterprises across the UK
There were approximately 170,000 digital enterprises in the UK in 2015 – 7% of all UK enterprises at
that time. As with other elements of the economy, digital enterprises are heavily concentrated in
London/the South East of England though the degree of clustering for digital businesses is even more
pronounced than for other industries - these two regions together accounting 48% of all digital
businesses in 2015 compared with 34% of enterprises as a whole.
After London/the South East, the next largest concentration of digital enterprises can be found in the
East of England (11% of digital establishments in 2015), the South/North West of England (8% in each
case) and the West Midlands (7%) – all other regions/devolved nations were home to 5% or less of
digital business enterprises.
Table 1: Business enterprises by UK nation/region, 2015
Number of enterprises Share of UK enterprises
Digital
enterprises
All enterprises Digital
enterprises
All enterprises
Digital density (digital as a % of area total)
United Kingdom
169,900
2,449,400 100%
100%
7%
England 156,400
2,116,300 92%
86%
7%
Wales 3,600
97,800 2%
4%
4%
Scotland 8,400
168,300 5%
7%
5%
Northern Ireland 1,500
67,100 1%
3%
2%
English regions:
North East 2,700
65,700 2%
3%
4%
North West 13,100
236,000 8%
10%
6%
Yorkshire and The Humber 8,400
172,200 5%
7%
5%
East Midlands 8,400
164,700 5%
7%
5%
West Midlands 11,200
191,600 7%
8%
6%
East 18,400
243,000 11%
10%
8%
London 44,900
444,900 26%
18%
10%
South East 36,200
377,400 21%
15%
10%
South West 13,100
220,800 8%
9%
6%
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
As illustrated in the table above, digital enterprises also account for a much higher proportion of the
regional total within London/the South East of England (10% in each case) whilst amongst the remaining
nations/regions only the East of England has a ‘digital density’ approaching this level (8%). All other
major geographies instead are seen to exhibit a digital density of 6% or less with the North East of
England and Northern Ireland in particular associated with figures of 4% and 2% respectively.
This picture is broadly consistent at sub-regional level though there are ‘small areas’ associated with
above average digital densities outside of the South East of England – notably Edinburgh (11%), West
Lothian, Coventry and Solihull (10% in each case) along with Poole and South Gloucestershire (9%).
Conversely, the Isle of While, though within the South of England, is associated with a digital density of
just 4%.
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Factsheet:
Digital industries in the UK
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Figure 1: Digital ‘density’ by local authority district, 2015
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
3. Trends in digital enterprises
Between 2014 and 2015, the number of digital enterprises in the UK rose by 7% (11,500) – a slightly
lower rate of growth than that associated with enterprises as a whole during this period (i.e. 8%).
Looking longer term however, growth in the number of digital businesses has been far above the norm
and almost double the rate of growth for UK businesses more generally over the 2010 – 2015 period
(with comparison figures of 30% and 17% respectively for digital/all industries).
By nation/region, growth in digital enterprises has been much higher in London than in other areas of the
UK with associated increases of 11% and 54% respectively in the capital’s digital business base over
the past year/five year period. In fact over the past 12 months, London was the only region in which
growth in digital enterprises actually exceeded the overall growth rate for UK businesses as a whole (i.e.
11% growth digital enterprises in London vs 8% for all industries across the UK).
Top ten digital densities by local authority
Reading 21%
Wokingham 19%
Slough 18%
Hounslow 18%
Milton Keynes 17%
Bracknell Forest 16%
Redbridge 16%
Harrow 14%
Tower Hamlets 14%
Kingston upon Thames 14%
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Factsheet:
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5
Table 2: Change in the number of business enterprises by UK nation/region, 2010-15
┌─── Change ───┐
2010 2014 2015 2014-15 2010-15
All enterprises
2,100,400
2,263,600
2,449,400 185,800
8%
349,000 17%
Digital enterprises
130,600
158,400
169,900
11,500
7%
39,300 30%
UK nation:
England
120,300
145,900
156,400
10,500
7%
36,200 30%
Wales
3,100
3,300
3,600
300
8%
600 18%
Scotland
6,100
7,800
8,400
600
8%
2,300 37%
Northern Ireland
1,200
1,400
1,500
100
6%
300 23%
English region:
North East
2,300
2,500
2,700
200
8%
500 21%
North West
10,700
12,400
13,100
700
6%
2,400 22%
Yorkshire and The Humber
6,700
7,800
8,400
600
8%
1,700 26%
East Midlands
7,100
8,000
8,400
400
5%
1,300 18%
West Midlands
9,300
10,600
11,200
600
5%
1,900 20%
East
15,000
17,300
18,400
1,200
7%
3,400 23%
London
29,100
40,500
44,900
4,500
11%
15,800 54%
South East
29,400
34,200
36,200
2,000
6%
6,800 23%
South West
10,700
12,700
13,100
500
4%
2,400 22%
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
Though London demonstrated the highest region-wide rate of digital enterprise growth, much greater
increases in the number of digital enterprises were recorded within a number of UK sub-regions outside
of the capital over both the 2014-15 and 2010-15 periods. Limavady, Northern Ireland was the most
notable of these with annual/5 year growth rates of 50% and 200% respectively, though as with many
other such cases, the recorded growth was from a very low initial base.
Table 3: Largest changes in digital enterprises by sub-region 2014-15 and 2010-15
Rank
District
Enterprises (2015)
Change (2014-15) District
Enterprises (2015)
Change (2010-15)
1 Antrim
40
60.0%
Merthyr Tydfil 30 200%
2 Orkney Islands
15
50.0%
Limavady 15 200%
3 Cookstown
15
50.0%
Barking and Dagenham 515 134%
4 Limavady
15
50.0%
Newham 1,105 133%
5 Omagh
15
50.0%
Redbridge 1,835 116%
6 Carrickfergus
20
33.3%
Hackney 1,490 104%
7 Craigavon
60
33.3%
West Dunbartonshire 70 100%
8 Conwy
115
27.8%
Fermanagh 30 100%
9 Rotherham
300
27.7%
Islington 1,930 83%
10 Darlington
140
27.3%
Hounslow 2,135 81%
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
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Factsheet:
Digital industries in the UK
6
Whilst many areas were associated with substantial increases in the size of their digital business base in
recent years, there were also a number in which a decline in digital enterprises was recorded – most
often within what could be described as outer areas of the UK as illustrated in the figures below.
Figure 2: Changes in digital enterprises by local authority district, 2014-15 and 2010-15
2014-15 2010-15
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
4. Digital specialisation
The UK digital industry is predominantly IT focussed and in 2015, 91% of all digital enterprises were
classed as IT organisations compared with 8% that were Telecoms focussed and 1% that were Games
related.
In each case (IT/Telecoms/Games), the majority of enterprises are seen to be providers of digital
services as opposed to manufacturers/distributors, though the services bias is less pronounced amongst
Telecoms enterprises – 10% of which were classed as manufacturers in 2015 (compared with 1% for
the digital industries as a whole, 1% for IT enterprises and <1% for games).
A comparison of the digital industry distribution across the four UK nations in 2015 reveals a similar
picture for England, Scotland and Wales - however in the case of Northern Ireland there was a much
larger proportion of digital enterprises focussed upon sales/distribution activities (15% vs 6% for the UK
as a whole) and this holds true for both IT and Telecoms businesses. In addition, within the Telecoms
sub-sector, a much lower proportion of digital firms in Northern Ireland in 2015 were classed as
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Factsheet:
Digital industries in the UK
7
manufacturers then in other UK nations (i.e. 5% compared with around 10% for England, Scotland and
Wales).
Table 4: Digital enterprises by nation and digital sub-group, 2015
United
Kingdom
England
Wales
Scotland
Northern Ireland
Digital enterprises
169,900
156,400
3,600
8,300
1,500
IT
91%
91%
89%
92%
86%
Telecoms
8%
8%
10%
7%
14%
Games
1%
1%
1%
1%
<1%
IT
154,900
142,700
3,200
7,700
1,300
IT - manufacturing
1%
1%
1%
1%
1%
IT - sales/distribution
4%
4%
4%
3%
10%
IT - services
96%
96%
95%
97%
89%
Telecoms
13,500
12,300
400
600
200
Telecoms - manufacturing
10%
10%
11%
10%
5%
Telecoms - sales/distribution
29%
28%
29%
27%
51%
Telecoms - services
62%
62%
60%
62%
44%
Games
1,500
1,400
<100
100
<100
Games - manufacturing
-
-
-
-
-
Games – sales/distribution
12%
12%
-
10%
-
Games – services
88%
88%
-
90%
-
Digital
169,900 156,400 3,600 8,300 1,500
Manufacturing
1% 1% 2% 1% 1%
Sales/distribution
6% 6% 7% 5% 15%
Services
93% 93% 91% 94% 83%
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
Further analysis for the English regions again presented a similar picture though London, like Northern
Ireland was notable for a below average proportion of manufacturing enterprises within the Telecoms
sub-sector (i.e. 5% again – half the UK average figure of 10%).
5. Change in digital structure
Between 2010 and 2015 the most notable increase in the number of digital enterprises was for Games
establishments which grew in number by 171% over the five year period – a rate far above that for both
IT businesses (up 31%) and Telecoms firms (14%).
The other broad industry trend apparent from the IDBR data is the decline in the number of
manufacturing and sales/distribution businesses over the past five years (down 14% and 5%
respectively) which is in stark contrast to the changes recorded for digital services (up 34%).
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Factsheet:
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In fact, a closer examination of the services data reveals a further three industry sub-groups for which
the number of businesses has more than doubled over the past five years i.e. IT programming (131%),
wired telecoms (138%) and wireless telecoms (142%).
Table 5: Industry trends, 2010-15
┌─── Change ───┐
2010 2014 2015 2014-15 2010-15
All enterprises 2,100,400 2,263,600 2,449,400 185,800 8% 349,000 17%
Digital enterprises
130,600
158,400
169,900
11,500
7%
39,200
30%
Digital manufacturing
2,700
2,100
2,300
200
8%
-400
-14%
IT - manufacturing
1,000
800
1,000
200
21%
<1%
-1%
Telecoms - manufacturing
1,700
1,300
1,300
<1%
-400
-22%
Games - manufacturing - - - - - - -
Digital sales/distribution
10,100 9,500 9,700 200 2% -500 -5%
IT - sales/distribution
6,200
5,500
5,600
100
2%
-600
-10%
Telecoms - sales/distribution
3,800
3,800
3,900
<100
1%
100
1%
Games – sales/distribution 100 200 200 <100 20% 100 89%
Digital services
117,800 146,800 157,900 11,100 8% 40,100 34%
IT services
111,000
137,400
148,300
10,800
8%
37,300
34%
IT - programming
12,700
29,000
29,400
300
1%
16,600
131%
IT - consultancy
66,700
80,300
90,600
10,300
13%
23,900
36%
IT - data
2,700
3,000
3,100
100
5%
400
17%
IT - other
28,900
25,100
25,200
100
<1%
-3,700
-13%
Telecoms services
6,400
8,100
8,300
300
3%
2,000
31%
Telecoms - wired
600
1,300
1,400
100
7%
800
138%
Telecoms - wireless
500
1,100
1,200
100
11%
700
142%
Telecoms - other
5,300
5,700
5,800
100
1%
500
8%
Games services 500 1,300 1,300 <100 3% 900 187%
All IT 118,200 143,800 154,900 11,100 8% 36,700 31%
All Telecoms 11,900 13,200 13,500 300 2% 1,600 14%
All Games 600 1,400 1,500 100 5% 1,000 171%
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
6. Legal status
Virtually all (95%) digital businesses in 2015 were registered as companies as opposed to sole
proprietor (4%) or other business entities (i.e. partnership, non-profit organisations etc.). By contrast,
amongst the wider economy just 67% of enterprises were companies and 20% were found to be sole
traders.
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Factsheet:
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The proportion of digital businesses registered as sole traders was notably higher within the digital
manufacturing sub-sector (12%) - Telecoms manufacturing in particular (14%) though still well below the
all industry average for the UK.
Figure 3: Legal status of digital and other enterprises in the UK, 2015
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
7. Change in legal status distribution
As would be expected, growth in the digital business base over the past five years was more
pronounced amongst digital SMEs (up 30% over the period compared with growth of 18% in the number
of large establishments). Given the overall predominance in the number of businesses of this size there
has however been little change in the broad distribution of digital businesses in the UK with SMEs
accounting for 99.8% of digital enterprises throughout the five year period.
67%
95%
96%
91%
97%
96%
87%
89%
96%
91%
82%
91%
93%
97%
100%
97%
95%
84%
90%
96%
20%
4%
3%
7%
3%
3%
9%
8%
3%
7%
14%
6%
6%
3%
3%
3%
4%
12%
7%
3%
13%
1%
1%
2%
1%
4%
3%
1%
2%
4%
3%
1%
1%
4%
3%
1%
All enterprises
Tech
IT
Telecoms
Games
IT
IT - manufacturing
IT - sales/distribution
IT services
Telecoms
Telecoms - manufacturing
Telecoms - sales/distribution
Telecoms services
Games
Games - manufacturing
Games - distribution
Games -services
Tech
Manufacturing
Sales/distribution
Services
Company Sole proprietor Other
na
Digital enterprises
IT
Telecoms
Games
Tech
All enterprises
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8. Digital enterprises by number of employees
As with the economy as a while, virtually all digital enterprises can be classed as SMEs (small/medium
sized enterprises) and in 2015 just 0.2% of digital businesses were considered as large organisations
(employing 250 or more staff). By comparison, the proportion of large enterprises in the UK overall was
actually double this level (0.4%).
Conversely, 94% of digital enterprises and 89% of enterprises as a whole were found to employ less
than ten staff – again illustrating the extent to which micro businesses predominate within the economy.
Analysis of the digital industries by size and sub-sector shows a relatively large proportion of Telecoms
enterprises to be medium/large organisations and this was also the case for digital sales/distribution
businesses.
Table 6: Digital industry by size (employment based) and sub-sector, 2015
n
Micro
Small
Medium
Large
All enterprises
2,449,400
89%
9%
2%
0.4%
Digital enterprises
169,900
94%
5%
1%
0.2%
IT
154,900
95%
4%
1%
0.1%
Telecoms
13,500
86%
11%
2%
0.6%
Games
1,500
91%
7%
1%
0.3%
IT
154,900
95%
4%
1%
0.1%
IT - manufacturing
1,000
92%
6%
2%
-
IT - sales/distribution
5,600
87%
10%
2%
0.5%
IT services
148,3000
95%
4%
1%
0.1%
Telecoms
13,500
86%
11%
2%
0.6%
Telecoms - manufacturing
1,300
83%
12%
4%
0.8%
Telecoms - sales/distribution
3,900
81%
16%
3%
0.6%
Telecoms services
8,300
89%
8%
2%
0.5%
Games
1,500
91%
7%
1%
0.3%
Games - manufacturing
-
-
-
-
-
Games - sales/distribution
200
91%
9%
-
-
Games - services
1,300
91%
7%
1%
0.4%
Digital
169,900
94%
5%
1%
0.2%
Manufacturing
2,300
87%
10%
3%
0.4%
Sales/distribution
9,700
85%
12%
2%
0.6%
Services
157,900
95%
4%
1%
0.1%
Source: Analysis of data from NOMIS/IDBR undertaken by the Tech Partnership
There was little difference in the overall size distribution of digital enterprises by nation/region though in
Northern Ireland the proportion of micro enterprises in the digital sector was seen to be slightly below
average (92% vs 94% for all digital enterprises) – this said, the proportion of micro and small enterprises
combined was little different from the overall digital figure.
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9. Change in size distribution
As would be expected, growth in the digital business base over the past five years was more
pronounced amongst digital SMEs (up 30% over the period compared with growth of 18% in the number
of large establishments). Given the overall predominance in the number of businesses of this size there
has however been little change in the broad distribution of digital businesses in the UK with SMEs
accounting for 99.8% of digital enterprises throughout the five year period.
10. Employment levels
There were 1.06m people working in digital businesses in 2015 – 3% of the UK workforce at that time.
Of these workers, more than eight in ten (83%) were working in services establishments, one in ten
within digital sales/distribution businesses and less than one in ten within digital manufacturing firms.
As noted for enterprises in the digital industry in section 4, employment across digital businesses is
mainly focussed in IT (74%), with Telecoms employing 24% and Games 2%.
Table 7: The digital workforce by industry sub-group, 2010-2015
┌─── Change ───┐
2010 2014 2015 Share 2014-15 2010-15
All industries
28,882,000
30,257,000
30,889,000
632,000 2%
2,007,000 7%
Digital industries
883,000
1,031,000
1,061,000
100%
29,000 3%
178,000 20%
Digital manufacturing
82,000
74,000
68,000
6%
-7,000 -9%
-15,000 -18%
IT - manufacturing
57,000
55,000
49,000
5%
-5,000 -9%
-7,000 -13%
Telecoms - manufacturing
26,000
20,000
18,000
2%
-2,000 -8%
-7,000 -29%
Games - manufacturing
Digital sales/distribution
113,000
116,000
111,000
10%
-5,000 -4%
-3,000 -2%
IT - sales/distribution
61,000
63,000
56,000
5%
-7,000 -11%
-5,000 -9%
Telecoms - sales/distribution
50,000
52,000
53,000
5%
2,000 3%
3,000 6%
Games - sales/distribution
2,000
2,000
2,000
0%
10%
-1,000 -25%
Digital services
687,000
841,000
882,000
83%
41,000 5%
195,000 28%
IT services
495,000
629,000
684,000
64%
55,000 9%
188,000 38%
IT - programming
199,000
247,000
270,000
25%
23,000 9%
71,000 36%
IT - consultancy
203,000
302,000
325,000
31%
23,000 7%
122,000 60%
IT - data
12,000
17,000
10,000
1%
-7,000 -40%
-1,000 -12%
IT - other
82,000
61,000
78,000
7%
17,000 27%
-4,000 -4%
Telecoms services
182,000
191,000
180,000
17%
-10,000 -5%
-2,000 -1%
Telecoms - wired
60,000
56,000
55,000
5%
-1,000 -2%
-5,000 -8%
Telecoms - wireless
84,000
88,000
77,000
7%
-11,000 -13%
-7,000 -8%
Telecoms - other
38,000
46,000
48,000
5%
2,000 5%
10,000 26%
Games - services
10,000
22,000
18,000
2%
-4,000 -17%
8,000 86%
All IT
613,000
746,000
789,000
74%
43,000 6%
176,000 29%
All Telecoms
258,000
262,000
252,000
24%
-10,000 -4%
-6,000 -2%
All Games
12,000
23,000
20,000
2%
-3,000 -15%
8,000 65%
Source: Analysis of data from the ONS Annual Population Survey (APS) undertaken by the Tech Partnership
JUNE 2016
Factsheet:
Digital industries in the UK
12
Compared with the previous year, the number of digital workers was up by 3% - a rate of growth 50%
greater than that recorded for the UK workforce as a whole (2%). Over the longer term, the difference
was even more striking however with digital workers increasing in number by almost three times the rate
for workers as a whole between 2010 and 2015 (i.e. with growth rates of 20% and 7% respectively).
Even greater increases in workforce numbers over the 2010-15 period were recorded for the games
services (development) and IT consultancy sub-industries (86% and 60% respectively) and in the
second case such growth was all the more notable due to the relatively large size of this employment
sector (302,000 people in 2014 and 325,000 in 2015).
11. Turnover for the digital industries
Turnover amongst digital businesses in 2014 was £209 billion – 6% of total turnover in the UK at that
time. Digital services businesses accounted for the major share of turnover (75%) followed by digital
sales/distribution firms (23%) and digital manufacturing (2%) whilst the spit between IT, telecoms and
games businesses was 59:40:1.
Table 8: Turnover (£ m’s) amongst the digital industries, 2009-2014
┌─── Change ───┐
2009 2013 2014 Share 2013-14
2009-14
All industries
2,968,900
3,643,600
3,729,500
-
85,900 2%
760,600 26%
Digital industries
178,200
201,800
209,400
100%
7,600 4%
31,200 17%
Digital manufacturing
4,500
4,900
4,500
2%
-400 -7%
<1% 1%
IT - manufacturing
1,800
2,100
1,800
1%
-300 -15%
<1% 3%
Telecoms - manufacturing
2,700
2,700
2,700
1%
<100 -1%
<-1% -1%
Games - manufacturing
Digital sales/distribution
42,700
48,700
47,200
23%
-1,500 -3%
4,600 11%
IT - sales/distribution
25,000
29,900
28,800
14%
-1,100 -4%
3,800 15%
Telecoms - sales/distribution
17,000
18,100
17,800
8%
-300 -2%
700 4%
Games - sales/distribution
600
700
700
<1%
<100 -1%
100 9%
Digital services
131,100
148,300
157,700
75%
9,400 6%
26,600 20%
IT services
66,700
84,600
93,100
44%
8,500 10%
26,400 40%
IT - programming
12,900
17,100
19,000
9%
1,900 11%
6,100 47%
IT - consultancy
30,600
37,000
40,500
19%
3,500 9%
9,900 32%
IT - data
5,400
8,500
9,100
4%
600 7%
3,800 70%
IT - other
17,800
22,000
24,600
12%
2,600 12%
6,800 38%
Telecoms services
63,500
62,600
63,600
30%
1,000 2%
<100 <1%
Telecoms - wired
1,100
1,500
1,600
1%
100 7%
600 52%
Telecoms - wireless
1,400
1,900
2,300
1%
400 19%
900 64%
Telecoms - other
61,100
59,200
59,700
28%
500 1%
-1,400 -2%
Games - services
800
1,000
1,000
<1%
-100 -6%
100 15%
IT
93,500
116,700
123,700
59%
7,000 6%
30,200 32%
Telecoms
83,300
83,500
84,000
40%
600 1%
800 1%
Games 1,400 1,700 1,600 1% -100 -4% 200 13%
Source: Analysis of data from the ONS Annual Business Survey (ABS) undertaken by the Tech Partnership
JUNE 2016
Factsheet:
Digital industries in the UK
13
Compared with the previous year (2013), turnover was up by 6% amongst the digital services industries
- three times the overall growth rate registered for the UK economy as a whole (2%). Growth amongst IT
businesses was also higher over the 2009-14 period (32% vs 26%) and, in the case of wireless
telecoms/IT-data businesses in particular was more than double the overall rate recorded.
12. Digital contribution to the economy
The digital industries gross value added (GVA) to the UK economy in 2014 was £94.8bn – 6% of the
annual total for all industries. Of the digital contribution, 62% was from IT businesses, 37% from
Telecoms enterprises and just 0.4% from Games establishments. Digital manufacturers accounted for
just 2% of digital GVA during 2014 compared with 9% for sales/distribution businesses and 89% for
digital service providers.
Table 9: Gross value (£ m's) added by the digital industries, 2009-2014
┌─── Change ───┐
2009
2013
2014
Share
2013-14
2009-14
All industries 1,348,500
1,546,900
1,618,300 -
71,400 5%
269,800 20%
Digital industries
74,800
88,100
94,800 100%
6,600 8%
19,900 27%
Digital manufacturing
1,800
2,400
2,000 2%
-400 -15%
200 14%
IT - manufacturing
700
1,000
900 1%
-100 -6%
200 37%
Telecoms - manufacturing
1,100
1,400
1,100 1%
-300 -21%
<100 <1%
Games - manufacturing
-
-
- -
- -
- -
Digital sales/distribution
7,000
9,500
8,300 9%
-1,200 -12%
1,400 19%
IT - sales/distribution
4,100
5,600
4,400 5%
-1,200 -22%
200 5%
Telecoms - sales/distribution
2,800
3,600
3,800 4%
200 6%
1,000 37%
Games - sales/distribution
-
300
200 <1%
-200 -50%
100 307%
Digital services
66,000
76,200
84,400 89%
8,200 11%
18,300 28%
IT services
38,600
50,000
53,700 57%
3,800 8%
15,200 39%
IT - programming
6,900
10,200
10,800 11%
600 6%
3,800 55%
IT - consultancy
18,500
22,400
24,200 26%
1,800 8%
5,700 31%
IT - data
3,800
6,400
6,500 7%
100 2%
2,700 71%
IT - other
9,400
11,000
12,400 13%
1,300 12%
3,000 31%
Telecoms services
27,100
26,000
30,400 32%
4,400 17%
3,200 12%
Telecoms - wired
400
800
900 1%
100 13%
500 115%
Telecoms - wireless
800
1,000
1,300 1%
300 34%
500 68%
Telecoms - other
25,900
24,200
28,100 30%
3,900 16%
2,200 8%
Games - services
300
300
300 <1%
<100 -1%
-100 -22%
IT
43,400
56,500
59,000 62%
2,500 4%
15,600 36%
Telecoms
31,100
31,000
35,300 37%
4,300 14%
4,200 14%
Games
400
600
400 <1%
-200 -29%
100 16%
Source: Analysis of data from the ONS Annual Business Survey (ABS) undertaken by the Tech Partnership
JUNE 2016
Factsheet:
Digital industries in the UK
14
Compared with the previous year, digital GVA is estimated to have increased by 8% - a rate of growth
far in excess of that for UK businesses as a whole (5%). Moreover, the increase in digital GVA was also
found to have exceeded overall growth in the economy over the previous five years (2009-14) with
comparison figures of 27% and 20% respectively.
By industry sub-group, the largest increases in digital GVA in recent years appear to have occurred in
Games sales/distribution (up 307% between 2009 and 2014), wired/wireless Telecoms (115% and
68%) and data services (71%), whilst Games services (development) was the only digital sub-industry
associated with a decline in GVA over the period.
Over the most recent year however, declines were recorded also amongst a number of digital sub-
groups i.e. IT/Games sales/distribution, all elements of digital manufacturing along with games services
again.
13. Digital contribution per worker
The gross value added to the economy per worker in the digital industries as a whole during 2014 was
£92,000 - almost twice the average contribution made by UK workers during the year (£54,000). GVA
per head varied substantially in 2014 according to the nature of digital industry with digital services 88%
above but digital manufacture ring 49% lower than the all industry average.
Table 10: GVA per head, 2010-14
┌──── Change ────┐
2010 2013 2014
Percentage above norm
2013-14
2010-14
All industries £48,000
£52,000
£53,000
-
£1,000 3%
£5,000 11%
Digital industries £86,000
£89,000
£92,000
72%
£3,000 4%
£5,000 6%
Digital manufacturing £32,000
£32,000
£27,000
-49%
-£5,000 -14%
-£4,000 -13%
Digital sales/distribution £70,000
£83,000
£72,000
34%
-£11,000 -13%
£2,000 2%
Digital services £96,000
£95,000
£100,000
88%
£6,000 6%
£5,000 5%
Source: Analysis of data from the ONS Annual Business Survey (ABS) AND Annual Population Survey (APS) undertaken by the Tech Partnership
As illustrated in the table above, though higher than average, GVA per head in the digital industries
appears to have grown at a slower rate over the 2010-14 period than that for UK businesses as a whole
(i.e. 6% vs 11% respectively) though over the most recent year the growth rate was slightly higher than
the all industry average (4% vs 3%).
JUNE 2016
Factsheet:
Digital industries in the UK
15
Notes on data sources/presentation:
1. Three main sources of data have been employed in the production of this factsheet – the Office for National
Statistics (ONS) Interdepartmental Business Register (IDBR), Annual Business Survey (ABS) and Annual
Population Survey (APS):
a. The IDBR is ‘a comprehensive list of UK businesses used by government for statistical purposes’ comprising
data for over 2.1 million businesses in all sectors of the UK economy. The primary IDBR inputs are the Value
Added Tax (VAT) system from HMRC (Customs) and Pay As You Earn (PAYE) from HMRC (Revenue).
b. The ABS is ‘the key resource for understanding the detailed structure, conduct and performance of
businesses across the UK.’ It is based on survey returns from approximately 74,000 UK businesses each
year sampled from the IDBR and incorporates data on turnover, purchases, employment costs, capital
expenditure and stocks.
c. The APS is a continuous household survey undertaken across the UK to ‘provide information on important
social and socio-economic variables at local levels’. The APS (and the LFS) are recommended sources for
socio-economic and employment-related statistics, which are collected from approximately 320,000
respondents per year.
2. Data has been extracted using the ONS National On-Line Manpower Information Service (NOMIS), through
web/direct enquiry and via the data service.
3. ‘Digital industries is the collective term given to businesses classified according to the following ONS Standard
Industrial Classification (SIC2007) codes:
Digital manufacturing
IT 18.203 - Reproduction of computer media
26.2 - Manufacture of computers & peripheral equipment
Telecoms 26.3 - Manufacture of communication equipment
27.31 - Manufacture of fibre optic cables
Games - na
Digital sales/distribution
IT 46.51 - Wholesale of computers, computer peripheral equipment & software
47.41 - Retail sale of computers, peripheral units & software in specialised stores
58.29 - Other software publishing
Telecoms 46.52 - Wholesale of electronic & telecommunications equipment and parts
47.42 - Retail sale of telecommunications equipment in specialised stores
Games 58.21 - Publishing of computer games
Digital services
IT 62.01/2 - Business and domestic software
63.1 - Data processing, hosting and related activities; web portals
95.11 - Repair of computers and peripheral equipment
Telecoms 61 - Telecommunications activities
95.12 - Repair of communication equipment
Games 62.01/1 - ready made interactive leisure and entertainment software development
JUNE 2016
Factsheet:
Digital industries in the UK
16
4. Figures presented in this datasheet have been rounded according to the following convention:
businesses/establishment data (IDBR) - to the nearest 100, workforce estimates (APS) – nearest 1,000,
GVA/turnover data (ABS) – nearest 100. Slight discrepancies in the data totals may occur as a result of the
rounding process.
5. ONS describe a business enterprise as ‘the smallest combination of legal units (generally based on VAT and/or
PAYE records) which has a certain degree of autonomy within an enterprise group’. The terms enterprise/
business/ firm/ company have been used interchangeably throughout the report.
6. A sole proprietorship is a business that has a single owner who is responsible for making decisions for the
company. A partnership consists of two or more individuals who share the responsibility of running the company.
A corporation is one of the most recognizable business structures and has a separate identity from the owners of
the company. One or more owners may participate as shareholders of a corporation.
7. Gross Value Added (GVA) broadly equates to the revenue (turnover) generated by a service or product less the
associated input costs (primarily purchases) involved in production.
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+44 207 963 8920 | [email protected]
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Although The Tech Partnership has used its reasonable endeavours in compiling the document it does not guarantee nor shall it be responsible
for reliance upon the contents of the document and shall not be liable for any false, inaccurate or incomplete information. Any reliance placed
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